Intellectual capital, absorptive capacity and product innovation

Abstract

Purpose The purpose of this paper is to study the influence of intellectual capital on a firm’s absorptive capacity (ACAP), and of ACAP on product innovation. The authors argue that intellectual capital and other sets of intangible assets are mobilized by firms through dynamic capabilities such as ACAP. Product innovation is one of the results of this process. Design/methodology/approach A quantitative study was conducted, including 500 firms of different sizes, industries and technological intensities located in southern Brazil. The validity of constructs and the theoretical model were confirmed by structural equation modeling. Findings The authors found that intellectual capital does influence ACAP, albeit differently on each of ACAP’s dimensions. Acquisition, assimilation and exploitation of knowledge are more decisively influenced by structural capital, followed by human capital. The ability of transformation of knowledge is evenly influenced by structural and human capital, and more moderately so by social capital. The results also showed that ACAP influences product innovation, but each of its dimensions demonstrated a different impact. Practical implications This study helps practitioners to identify the development of a firm’s intangible resources and its influences on product innovation. This characterization can serve as a benchmark for managers or private and public companies to define strategies and policies to stimulate innovation. Originality/value Few studies present a theoretical discussion about the relationship between a firm’s resources and ACAP’s dimensions in broad empirical contexts or in emerging countries.

Intellectual capital, entrepreneurial orientation, and technical innovation in small and medium‐sized enterprises

“…In particular, HC and relation capital were found to have the strongest and most important effects on TI, followed by STC and human competence. The particular importance of IC dimensions on the development of TI has been earlier emphasized in previous related studies (i.e., Bontis, ; Wang & Chang, ; Wu et al, ; Wang, ; Dost et al, ; Engelman et al, ). For example, these studies concur with this study's finding concerning the significant effect of HC on TI, in terms of emphasizing the prominent contribution, which a firm's HC plays in the context of innovation, by highlighting it as the most important asset of IC for innovation.…”

“…Exploratory factor analysis (EFA) employing principal component analysis with varimax rotation was conducted to assess construct validity and the unidimensionality of the measurements, which is consistent with many studies in the areas of IC and TI (e.g., Dost et al, ; Engelman et al, ; Field, ; Hair, Black, Babin, Anderson, & Tatham, ; Han & Li, ; Martín‐de‐Castro et al, ; Mitrega et al, ; Molodchik & Jardon, ; Ramadan et al, ; Rhee et al, ). To assess the EFA, four commonly used assumptions were followed: Sampling adequacy (Kaiser‐Meyer‐Olkin measure greater than 0.5) and Bartlett's test of sphericity to test homogeneity of variances statistics were statistically significant ( p < 0.05); the minimum eigenvalue for each factor to be one; considering the sample size, factor loading of 0.40 for each item was considered as the threshold for retaining items to ensure greater confidence; and varimax rotation was used because it is a good general approach that simplifies the interpretations of factors (Field, , p. 449).…”

“…Furthermore, and in light of the emergence of the "knowledgebased economy" and its emphasis upon investing in knowledgebased assets, many scholars and businesses developed a corresponding interest in the concepts of IC and knowledge management. As a result, a number of prior studies have focused on developing theoretical models that address how to effectively manage TI through IC, as well as examining how various components of IC facilitate the right conditions for product and process innovation to develop (e.g., Al-Khalil et al, 2014;Danish et al, 2016;Dost et al, 2016;Engelman et al, 2017;Han & Li, 2015;Martín-de-Castro et al, 2011;Rhee et al, 2010;Seleim & Khalil, 2011;Subramaniam & Youndt, 2005).…”

“…Following an organizational perspective, scholars have indicated and found that IC influences firm innovative capabilities (Engelman, Fracasso, Schmidt, & Zen, 2017;Martín-de-Castro, Delgado-Verde, López-Sáez, & Navas-López, 2011;Rhee, Park, & Lee, 2010;Subramaniam & Youndt, 2005). As such, a vital link has been established between an organization's IC and its capacity to innovate.…”

“…As has already been mentioned that there has been a considerable amount of academic research examining the direct effect of IC on TI, the extant literature has shown a clear interconnectedness between both constructs in numerous industries (e.g., Subramaniam & Youndt, 2005;Wu, Chang, & Chen, 2008;Marvel & Lumpkin, 2007;Schiuma & Lerro, 2008;Rhee et al, 2010;Martín-de-Castro et al, 2011;Seleim & Khalil, 2011;Al-Khalil, Dahiyat, & Al-Dalahmeh, 2014;Dost et al, 2016;Danish et al, 2016;Engelman et al, 2017;Molodchik & Jardon, 2017;Mitrega, Forkmann, Zaefarian, & Henneberg, 2017). However, this research program has generally not explored the existence of other factors exerting a potentially mediating effect upon the relationship between IC dimensions and TI.…”